Employment Law Update September 2013

Employment tribunal fees

From 29^th July 2013 employees and ex-employees wishing to bring an employment tribunal claim will be required to pay a fee with the claim and a further fee if the case goes to a hearing. The fees have been introduced by the coalition government to end what Chancellor George Osborne has described as a ‘one way bet’ against small businesses’. Justice Minister Helen Grant said:

"It is not fair on the taxpayer to foot the entire £74m bill for people to escalate workplace disputes to a tribunal. "We want people, where they can afford to do so, to pay a contribution. It is in everyone's interest to avoid drawn out disputes which emotionally damage workers and financially damage businesses. That's why we are encouraging quicker, simpler and cheaper alternatives like mediation."

The fees will be based on two levels. Level one claims are the simpler matters, normally heard by an Employment judge sitting alone and cover claims such as unpaid wages, claims for redundancy and notice pay. Level two claims include unfair dismissal and the discrimination claims.

The fees will be:

So an employee claiming unfair dismissal could have to pay £250 just to issue the claim and a further £950 for the hearing. If the employee wins the case there is provision for the fee to be recovered from the employer but it is not automatic. It will be at the Employment Judge’s discretion.

The introduction of fees has, however, been challenged by unions. Unite general secretary Len McCluskey said;

“What we are seeing today is injustice writ large as this worker-bashing government takes a sledgehammer to workers' rights - this is a throwback to Victorian times. "Seeking redress for unfair dismissal and discrimination and other injustices in the workplace is a fundamental human right - but now ministers are putting up insurmountable financial hurdles for working people in pursuit of justice."

 Unison claim that the fees deny workers access to justice and are a breach of human rights and have been given permission to have a judicial review. The case will be heard in October and the Tribunal service have said that if the review upholds the union claim any fees paid will be refunded.

However many employees and sacked workers may not have to pay any fees at all as there are procedures for remission. No fee at all is payable if the claimant is in receipt of certain benefits including income related employment and support allowance. There is also no fee payable if the claimant’s income is below certain levels as set out below;

For each additional child the figure is increased by £2,930.

There are also provisions for a full or partial remission based on a calculation of disposable income after taking into account three fixed allowances: £315 per month for general living expenses, £159 for a partner and £244 per child.

Many lower paid workers will most probably qualify for fee remission. It will, however, be that much more difficult to submit a claim as they will have to submit both the ET1 claim form and a fee remission claim with evidence of their income.

Recent years have seen a rise of ‘no win, no fee’ cases in employment law. Unlike claims for personal injury where the legal costs are usually paid by the losing side, costs are rarely awarded in employment cases. No win, no fee employment lawyers thus have had to recover their costs out of their client’s award. Under the old arrangements the risk to the employment lawyer was purely one of not being paid for their time if the claim failed. Under the new arrangement, if the client does not qualify for fee remission, a no win-no fee lawyer risks not only not being paid for his/her time but also being out of pocket for the tribunal fees. This may make ‘no win, no fee’ lawyers a little more selective in the cases they take on.

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